A.T.& T. alters merger to win audit ruling
Article Abstract:
AT&T has modified terms of its merger agreement with NCR Corp in an attempt to resolve questions about the accounting method to be used. AT&T wants approval from the Securities and Exchange Commission (SEC) to use the 'pooling-of-interest' method of accounting. If the pooling method is allowed, AT&T will use an all-stock transaction, which would be tax free for NCR's shareholders. Otherwise, AT&T will pay 60 percent in stock and 40 percent in cash, and the cash portion would be taxed. The problem concerns NCR's issuance of a $1 dividend during AT&T's initial attempt to acquire the company. The special dividend was issued to make the takeover less attractive to NCR stockholders. Regulations disallow companies from issuing special dividends prior to a merger, if they hope to qualify for the more financially favorable 'pooling-of-interests' accounting method.
Publication Name: The New York Times
Subject: News, opinion and commentary
ISSN: 0362-4331
Year: 1991
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A.T.& T. is questioned on accounting for NCR
Article Abstract:
Industry observers express surprise about AT&T's announcement that the company expects to use a 'pooling of interest' accounting method for its merger with NCR Corp. Such a use of pooling of interest is not consistent with a traditional interpretation of the rules. The issue must be decided by the Securities and Exchange Commission (SEC), which is deliberating. If AT&T is allowed to use the pooling of interest method, the comp~any plans an all-stock transaction, which would be tax-free to NCR's shareholders. Otherwise, AT&T plans to pay NCR's shareholders 60 percent in stock and 40 percent in cash, and the cash would be subject to taxation. On Monday, Jul 1, 1991, AT&T announced that it believed it would be able to account for the merger using pooling of interests.
Publication Name: The New York Times
Subject: News, opinion and commentary
ISSN: 0362-4331
Year: 1991
User Contributions:
Comment about this article or add new information about this topic:
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